Below is our initial take on recent bankruptcy-related developments:
Airbnb rival Sonder Holdings to file for bankruptcy after Marriott ends partnership | Business Insider
Guests were ejected from ongoing bookings as Marriott made the announcement on Sunday.
S&K Take: Sonder, a “short-term rentals” business, has been in the restructuring press for at least 18 months, so this isn’t a complete surprise, but the free fall chapter 7 has to raise a few eyebrows. Sonder was facing liquidity challenges in May of ’24 when it had to restate its 10-Q because of accounting issues. The company brought in the big restructuring guns and took measures to enhance liquidity in that time period, increasing loan commitments and issuing equity, but it looks like they couldn’t fix fundamental business issues (based on pure speculation) and the death knell was Marriott terminating their relationship with Sonder. That move has left some folks high and dry during their Sonder stays, with some getting the boot mid-stay. Not a great situation for them, particularly considering that Sonder is headed straight to a chapter 7 trustee. Might not be much more to see here, but we will keep an eye on the situation.
Hearings begin to finalize Purdue Pharma $7.4 billion bankruptcy settlement plan | ABC News
The Supreme Court had blocked an earlier version of the settlement that would have given the Sackler family immunity from lawsuits.
S&K Take: I should issue a spoiler alert for this post, but I imagine most of our intrepid readers know the ending. Judge Lane has indicated that he will confirm the Purdue plan and will issue a formal ruling to that effect next Tuesday. That marks the end of a six-year saga (Purdue filed in September of 2019) and will permit the distribution of billions in dollars to creditors (and in turn plaintiffs’ and litigation finance firms). This does not mark the end of the road for the Sackler family, however. As many of you know, if creditors sign on to the Sackler releases, they receive a greater distribution under the plan. They can, though, hold on to their Sackler claims and receive a lesser distribution, presumably suing the Sacklers and trying to navigate the vagaries of Jersey Trust law. If the written decision includes any golden nuggets, rest assured we will circle back.
